Final answer:
A private corporation can issue shares without a registration or prospectus to qualified investors such as angel investors, venture capital firms, and qualified institutional buyers. These transactions may fall under specific exemptions that ease the process of raising capital while minimizing regulatory compliance costs.
Step-by-step explanation:
Exemption from Registration and Prospectus for Corporation Shares
A private corporation may issue its shares without the need for registration and prospectus to a selected group of investors. These include but are not limited to angel investors, venture capital firms, and certain qualified institutional buyers. The availability of such exemptions is designed to ease the capital-raising process for small and growing firms, allowing them to expand without the same stringent regulatory requirements faced by public companies. The process is less costly and expedites the flow of capital to businesses in need. However, these private investors usually take on a more significant risk and often have better information or control over the corporation compared to typical shareholders.
Examples of such transactions are private placements or transactions that qualify for exemptions under regulations like Regulation D of the Securities Act of 1933 in the United States. Under such rules, corporations may target accredited investors - individuals or entities that meet certain financial criteria and are considered capable of bearing the economic risk of investing in securities that are not registered.